First and foremost is the all important matter of political perceptions. Because Massachusetts is considered to be a Democratic state (though Republicans have served as that state's governors for 16 of the last 19 years), losing this special election to fill the seat that had been held for the past 46 years by the U.S.'s preeminent Democrat, Edward Kennedy, is an emotional blow for the party. With the entire House and over one-third of the Senate gearing up for November's mid-term elections, the perception created by Democrats losing two governor's races last year (in New Jersey and Virginia) and now losing in Massachusetts can only serve to create the impression that the US electorate is turning against the President's party. This not only deflates the confidence of Democrats, but emboldens Republicans.
As important, is the impact this defeat will have on the President's legislative agenda. Given the deep partisan divide that has plagued Washington's politics, and the degree to which Republicans have been able to exercise greater discipline over their legislators than have Democrats, this loss now provides Republicans the extra vote they need to effectively paralyze the Senate for the rest of the year. The rules of the Senate provide that before any bill can be voted on, the body must agree to close debate. This requires the concurrence of 60 members. Until this loss in Massachusetts the Democrats had a fragile hold on the 60 votes they needed. Granted, two of those votes were held by members who are technically listed as Independents (Joe Lieberman of Connecticut and Bernie Saunders of Vermont) and four others were held by Senators whose conservative leanings required accommodation. But, when Democrats needed 60 votes to put forward their version of a health care bill, the 60 votes were there.
Because the Senate bill differs from an earlier health care bill passed by the House of Representatives, there are now only a few ways that comprehensive health care legislation can advance. The House of Representatives could simply affirm the Senate version, pass it and send it to the President's desk to be signed into law. This, however, most likely will not happen, since liberal Members of Congress oppose the more conservative Senate bill. The other way health care can advance is for Democrats to find some Republicans to work with them in order to reach a compromise. Since that was tried and failed all last year, and since this is an election year, there is little prospect this will happen.
There are other legislative devices Democrats can use to pare down health care reform, and pass piecemeal legislation that addresses some needed changes. This is what most likely will occur, but it is a far cry from the comprehensive overhaul of the health care industry that the President declared was to be his signature issue.
What is true for health care may also be true for much of the Administration's reform agenda. With Republicans emboldened by their win, and some Democrats fearful that the change in Massachusetts portends disaster for the party in November, it may now be harder for the White House to advance legislation on climate and energy, or on immigration.
What's interesting in all of this is what it says about the way the two parties operate. Looking back to the Reagan and George W. Bush Presidencies, it is intriguing that they never had 60 votes to pass the legislation that defined their Administrations. They projected a clear message, railing against "big government" and taxes, and asserted their executive authority. They both passed substantial tax cuts that bankrupted the government and resulted in enormous deficits, and Bush was successful in bullying Congress to give him the authority to go to war when he only had 49 Republicans in the Senate. Another measure of this ability of the Republicans to best Democrats on projecting a message, is the way they have been able to portray Democrats as the "status quo" and to blame them for the nation's ills. They've been successful at this despite the fact that Republicans have controlled both the House and Senate for almost 12 of the last 15 years, and Democrats have been in the White House for just two years over the past decade!
The only recourse for the President is to go on the offensive as he did last week in pushing for a more populist agenda. If Democrats cower after losing Massachusetts and muddy their reform agenda, there will be more losses in November, but if they fight back and project a clearer message, they might get something done between now and the mid-term elections.